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Basic transactions on Ethereum aren’t the only factors affected by the network’s lack of scalability. Ethereum’s problems affect nonfungible tokens (NFTs) and aspects of decentralized finance like loaning and borrowing. For example, building and trading NFTs on Ethereum can cost hundreds of dollars in gas fees due to network congestion.
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To solve Ethereum’s scalability problems, Buterin and the ETH crew have outlined a network upgrade called Ethereum 2.0, or Eth2. Ethereum 2.0 brings foundation-altering changes to how Ethereum works, but it will take years to implement. Since 2020, Ethereum developers have worked tirelessly on br...
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Phase 0
Phase 0 of the Ethereum 2.0 upgrade introduces what’s called the Beacon Chain. Launched on December 1, 2020, the Beacon Chain marks the shift to PoS, enabling users to stake (lock away) their Ethereum and become validators. That said, Phase 0 does not affect the main Ethereum blockchain, the Beac...
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Transitioning to Ethereum 2.0
Ethereum’s transition into 2.0 is broken down into various stages.
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Phase 1
With Ethereum 2.0, validators and other users can run their own shards, validating transactions and keeping the mainchain from seeing too much congestion. A proof-of-stake consensus method is required for shard networks to enter the Ethereum ecosystem safely. Staking will be introduced on the Bea...
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Phase 2
Finally, Phase 2 will see the introduction of Ethereum WebAssembly or eWASM.
The eWASM compiles code much faster than the EVM, speeding up processes within the network. Gas works more efficiently via the eWASM, and the eWASM is compatible with various traditional coding languages like C and...
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Breakdown of Ethereum 2.0
Ethereum 2.0 marks a significant shift in the network’s consensus algorithm. Instead of Ethereum running an energy-intensive proof-of-work algorithm, the Eth2 upgrade means switching to a proof-of-stake algorithm.
A PoS algorithm brings many benefits over a PoW one, adjusting various aspec...
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